Although we often tell clients that determining the reasonable notice period in any given situation is more art than science, one thing we’ve felt confident about is the 24-month cap – unless there are exceptional circumstances, no matter how much seniority an employee has and no matter what age he is, a Court will not award more than 24 months’ notice. But now, based on Hussain v. Suzuki Canada Ltd., it seems nothing is certain.[1]
In an Agreed Statement of Facts filed with the Court, counsel for the parties indicated that Mr. Hussain was 65 years old and had worked for Suzuki for 36 years when his employment was terminated without cause because the company restructured. Madam Justice Roberts found that, in combination, these facts constituted exceptional circumstances warranting a 26-month notice period. With the utmost of respect, we disagree, for a number of reasons:
First, there is simply nothing “exceptional” in this case.
Second, parties (and their counsel) need certainty and this piercing of the 24-month cap sets a dangerous precedent. Indeed, if there was only a 1% chance that someone in the plaintiff’s position would get a job, as posited by Madam Justice Roberts, why award 26 months? Why not 36 months? Or 48? Or until the actuarial tables say he would likely die? There is simply no legal rationale for the notice period awarded.
Third, employers must now bear the burden of the plaintiff’s age in two ways. Given the elimination of mandatory retirement in Ontario, they can’t require an employee with declining production to retire and yet the cost of a without cause termination is increased, at least in part, because his age will make finding a new job more difficult. If the law in Ontario is that employers cannot discriminate in employment, including in hiring, why is the terminating employer expected to pay for other employers’ anticipated decisions, themselves contrary to the Human Rights Code, not to hire the plaintiff?
[1] Hussain v. Suzuki Canada Ltd., 2011 CarswellOnt 12251.
Although we often tell clients that determining the reasonable notice period in any given situation is more art than science, one thing we’ve felt confident about is the 24-month cap – unless there are exceptional circumstances, no matter how much seniority an employee has and no matter what age he is, a Court will not award more than 24 months’ notice. But now, based on Hussain v. Suzuki Canada Ltd., it seems nothing is certain.[1]
In an Agreed Statement of Facts filed with the Court, counsel for the parties indicated that Mr. Hussain was 65 years old and had worked for Suzuki for 36 years when his employment was terminated without cause because the company restructured. Madam Justice Roberts found that, in combination, these facts constituted exceptional circumstances warranting a 26-month notice period. With the utmost of respect, we disagree, for a number of reasons:
First, there is simply nothing “exceptional” in this case.
Second, parties (and their counsel) need certainty and this piercing of the 24-month cap sets a dangerous precedent. Indeed, if there was only a 1% chance that someone in the plaintiff’s position would get a job, as posited by Madam Justice Roberts, why award 26 months? Why not 36 months? Or 48? Or until the actuarial tables say he would likely die? There is simply no legal rationale for the notice period awarded.
Third, employers must now bear the burden of the plaintiff’s age in two ways. Given the elimination of mandatory retirement in Ontario, they can’t require an employee with declining production to retire and yet the cost of a without cause termination is increased, at least in part, because his age will make finding a new job more difficult. If the law in Ontario is that employers cannot discriminate in employment, including in hiring, why is the terminating employer expected to pay for other employers’ anticipated decisions, themselves contrary to the Human Rights Code, not to hire the plaintiff?
What lessons can employers learn from it?
1. If you are terminating without cause and can’t negotiate an agreed package, pay any ESA entitlements (Suzuki failed to do so until litigation commenced). If the employee does not have a job at the end of the period represented by that payment, put the employee back on salary and benefit continuation for the balance of the period you believe constitutes reasonable notice in exchange for proof that the employee is undertaking a reasonable search for alternate employment. This way you will:
(a) meet your statutory obligations;
(b) obtain evidence about the plaintiff’s mitigation efforts;
(c) reduce your potential liability and the interest charges associated with that;
(d) To the extent that there is a disagreement as to what constitutes reasonable notice, you will increase the risk and the potential legal costs for the plaintiff relative to any potential award of damages, which may discourage the plaintiff from proceeding. As a practical matter, paying nothing makes litigation is a virtual certainty;
(e) By committing to provide salary continuation on an ongoing basis for what you say would be the reasonable notice period you may avoid the risk of a summary judgment decision for the entire damages amount as occurred in this case.
If you have any quesitons or would like more information on this topic, please contact Beth Traynor at [email protected] or call 519-672-2121.
About Siskinds
Siskinds Lawyers are experts in giving practical advice and representation concerning Employment Law, Labour Law and Human Rights.